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Trusts And Estates Services
Assets are distributed to beneficiaries via trusts and estates. Estates transfer the assets after a person passes away, whereas trusts may transfer the assets continuously.
When the trustee, a fiduciary, is expected to manage the trust on behalf of the beneficiaries, a fiduciary relationship is created between the grantor, the trustee, and the beneficiary. Trusts, which can be irrevocable or revocable, avoid the probate process. There may be tax benefits due to the difference in tax situation and tax rates of the grantor and beneficiary.Â
The irrevocable trusts are required to submit Form 1041, U.S. Income Tax Return for Trusts And Estates, for each taxable year.
Our team is here to assist you with planning, bookkeeping for Trust accounts, tax preparation and filing, and other tax-related tasks. Tax planning and preparation are essential parts of managing the financial future. Click HERE for more information. Â
Traditional estate planning, estate, and trust administration, including all related issues with the estate, gift, and income tax, trust creation, and related litigation, are all included in our services. When we represent clients, we frequently coordinate business operations and ownership with estate and financial planning for business owners and management. We apply our business expertise and problem-solving skills to create a strategy that achieves our clients’ goals.
We approach estate planning from both a lifetime and testamentary planning perspective for every client. Clients value both our empathy during emotionally intense periods and our comprehension of family dynamics. Our team provides clients confidence that our aim is to protect their wealth by using common sense solutions.
Maintain and Strengthen Your Financial Legacy
As your trusted advisor, we help you develop a trusts and estates plan that protects your assets and lowers the tax burden on you and your loved ones.
It is crucial to secure your assets to maintain the financial security of your loved ones. It is not always easy to prepare the tax returns and plans, and doing so usually demands specific expertise and experience.
We are Experienced with the fiduciary tax laws
Our experts have assisted clients for many years. We work with lawyers, financial advisors, and other industry professionals to develop the strategies that are customized to each client’s unique needs. We also keep up with any changes to tax law that may have an impact on how trusts and estates are created.
Our services include:
- Planning
- Trust Administration
- Trust Account Bookkeeping
- Allocating Assets To Designated Parties
- Gift Tax Preparation And Filing
- Income Tax Preparation And Filing
Check out our Accounting services as well.
Your future vision can be realized with the help of a well-thought-out estate plan and the expertise, resources, and guidance of an experienced team.
Trusts and Estates FAQ'S
A grantor trust is controlled by the grantor and is responsible for paying taxes through their own tax return. The income is taxed at ordinary income rates.Â
On the other hand, non-grantor trusts operate as a separate tax entity and is responsible for paying taxes on income. These can be either simple or complex. Simple trust distributes all earned income annually to the beneficiaries, while distributions from the principal are not allowed. For complex trusts, trustees use discretion to distribute income and principal can be distributed.Â
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Taxes are filed using Form 1041 and Schedule K-1. The due date for calendar-year is April 15, while for fiscal year the due date is the 15th day of the fourth month following the tax year close.Â
If the due date is on the weekend or a legal holiday, then the filing date is on the next business day..
For irrevocable trusts, there are no gift taxes – annual exclusion is $17,000 for 2023. Also, there is usually protection from estate taxes.
LLC is a pass-through entity; therefore, LLC ownership interests are personal property. The benefits of LLC interests in a trust include probate avoidance, privacy, incapacity planning, and asset protection.Â
A will allows the testator (the person creating the will) to specify:
- Who receives property at the testator’s death
- Whether beneficiaries receive gifts outright or in trust
- Who will act as personal representative
- Who will be the guardian of minor children
In the absence of a will, these matters are settled by state law.
The state law determines who gets the probate property if a decedent passes away without leaving a will.
- In the majority of states, the surviving husband and children come first. In certain states, children of the deceased always receive a part. If the surviving spouse has children who are not the decedent’s offspring, then the children may also be entitled to a part in some states.
- Distribution via representation, commonly known as per stirpes distribution, is often permitted by intestacy laws. The offspring of any heir who predeceases the decedent inherit the heir’s portion in equal shares.
- In some states, parents and siblings divide the estate when there is neither a spouse nor any descendants. In other cases, siblings only receive an inheritance if a parent is still alive while parents receive the entire estate.
- Grandparents often inherit first, followed by their descendants if there are no parents or parents’ descendants.
- According to intestacy law, the state is the last beneficiary. According to each state’s legislation, only relatives up to a particular degree inherit. The decedent’s assets “escheat” to the state after that. Depending on the state, a third cousin three times removed may inherit, whereas a second cousin may be considered too distantly connected to inherit in another state.
After someone passes away, someone (known as the “executor” or “administrator”) is responsible for handling their assets, or “estate.” They must settle the deceased person’s bills and taxes before distributing their assets to those who are legally entitled to them.
The estate tax levied by Chapter 11 of the Internal Revenue Code is calculated by the executor of a decedent’s estate using Form 706. The generation-skipping transfer (GST) tax levied by Chapter 13 on direct skips is likewise calculated using Form 706.
For transfers made to a spouse during life or at death, the marital deduction provides an unlimited estate and gift tax deduction. For instance, there would be no estate tax due if a person left their whole fortune to their surviving spouse through a will.
A “terminable interest” in property is one that will expire with time or upon the occurrence or non-occurrence of a certain circumstance. Therefore, terminable interests include life estates, terms for years, annuities, patents, and copyrights.